Equity Bank wants to share Yu’s infrastructure in a new plan to offer mobile communication services. Already, the bank has applied to the CAK (the Communications Authority of Kenya) for a licence to become a Mobile Virtual Network Operator (MVNO). CAK director general Francis Wangusi says the application has to undergo several stages of review as per the law before approval. The application has been forwarded to the NIS National Intelligence Service) for security evaluation after which the CAK will make a decision to grant Equity’s request.
Yu Mobile’s Managing Director, Madhur Taneja, confirms that talks are underway between the operator and Equity, as quoted by Smart Company: “We are in discussion with them as they are partners but I cannot comment on any developments in progress.”
Mobile banking is key to Kenya’s drive towards financial inclusion with the CBK reporting 1.3 trillion in mobile payment transactions over 2013. M-Pesa dominates mobile payments in Kenya and Safaricom has conveniently built an ecosystem around the service, currently 75% of the market utilize it. In total Safaricom’s has close to 21 million subscribers, the operator has consolidated its market position by offering value added services as well as voice, text and data solutions. M-shwari, a joint mobile banking initiative by M-Pesa and CBA (Commercial Bank of Africa) last year gained 1 million users by December.
Upon being granted an MVNO license, Equity is set to become the second largest operator with 8 million customers. The bank has partnered with Airtel and Telkom Kenya as well as facilitating ATM withdrawals via M-Pesa as part of its mobile strategy. As MVNO, Equity will exercise greater command over the mobile and electronic payments. As public transport in the market is set to go cashless by July, Equity has been aggressive in marketing its BebaPay card, steadily built partnerships that will allow it to take advantage of this development.
According to the CAK, Equity is not the only firm applying for an MVNO license. 4 other such applications have been received, says Francis Wangusi, although no names are supplied.
